I remember when I was young, there were "kits" to put together like Dynakit and Heathkit. I had a lot of fun putting my Dynaco PAT-4 and Stereo 120 together. That got me really hooked. There are really very few kits today. I don't think the kids are interested in that. In fact the number of audio salons in my area (excluding worst buy and sircut silly) is now zero. There is almost no place to audition equipment anyway. It's moved "underground". Thanks to smaller companies like AVA and Salk to keep the momentum going. Almost everything has to be purchased thru the web. Not that that in itself is bad, but makes it a hit and a miss putting a system together. Thankfully, on-line retailers offer a 30 day trial period. As far as new music is concerned, I of course can't stand RAP or Country but some (very few) new bands have some talent that keeps my music collection from stopping at the 1980's.
Is hi-fi dying? If you think the Ipod is the answer, then maybe..yes. An Ipod is a convenient carrier for portable music, but I'm sure not going to buy into it at all. I want my music in a physical form like vinyl, CD's, cassettes and stuff like that.
I guess as long as someone wants to buy equipment other than the "department store" type and is willing to shell out the do-ray-me, Hifi will survive, but it might be curiously different than it is even in its current state today.
W